STOXX Ltd, the operator of Deutsche Boerse Group’s index business, has announced that 12 of their smart beta index suite have been licensed by Italian asset manager Ersel Asset Management SGR to support a new mutual fund.
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Francois Millet (pictured), head of ETF and index product development at Lyxor says that 2016 has been the year of true take-off for smart beta in the ETF space. Millet reports that end of September saw EUR25 billion in assets in smart beta ETFs for Lyxor in Europe, with some EUR6.5 billion in flows.
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Almost a decade since the 2008 crisis and following an extended period of low interest rates, investors are actively looking for new ways to create wealth. Alternative sources of return such as via thematic investing, have the potential to unlock these new pockets of opportunity.
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Smart beta indexes and the ETFs based upon them have seen huge growth over recent years. Their ability to sit midway between active and passive investment management has endeared them to an audience of investors who have been floundering in a low interest rate and expensive equity environment.
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Index and analytics provider MSCI reports continued strong demand for factor indexes, with close to USD51 billion in net cash flows and USD17.5 billion of those flows flowing in to global factor based ETFs linked to MSCI’s factor indexes, year to date through 30 September, 2016.
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Richard Phillips (pictured) is Co-Founder, Senior Index Analyst, and Head of Index Operations at S-Network Global Indexes. He describes his firm as: “Blue collar finance, not white collar fancy suits and Maserati finance. We work in the mill and produce a good product.”
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Wider understanding of smart beta products and how they can be integrated into a portfolio is increasing the belief that these strategies will become more popular over the next three years, according to research for Invesco PowerShares.
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BlackRock has launched four US equity-focused ETFs in its range of iShares factor ETFs, designed to enable investors to tilt their portfolios to the areas of the US equity market they believe will outperform.
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Craig Lazzara, Global Head of Index Investment Strategy for S&P Dow Jones Indices writes that it is difficult for investors to judge smart beta, as it takes subtlety to evaluate a smart beta strategy against the claims that its vendor make.
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WisdomTree has launched tow new smart beta exchange traded funds (ETFs) on Xetra providing investors to participate in the performance of stock corporations with the best combined rank of growth and quality factors.
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Columbia Threadneedle Investments has launched three equity income smart beta exchange-traded funds (ETFs), the first in a series from the new Columbia Beta Advantage family of rules-based, factor-driven, smart beta ETFs.
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ERI Scientific Beta, the smart beta index provider offshoot of EDHEC Risk Institute, has launched a “pay for what you get” approach to index pricing that will disrupt the traditional model of fixed fees on assets under management and enable investors to relate their fees directly to smart beta index performance.
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